Higher surcharge on wealthy Indians in the budget has spooked non-resident and overseas funds.
It's an old saw of India's budget documents -- the devil lies in details of the fine print.
A higher surcharge on wealthy Indians in the budget has spooked non-resident and overseas funds enough to erase Rs. 2.3 lakh crore ($30 billion) in market value from companies in the S&P BSE Sensex over the past three sessions.
The reason: the realization that the new tax rate applies not just to the super rich but also to trusts -- a structure of choice for a large number of foreign funds that invest in the nation.
The proposal "seems to have inadvertently" dragged foreign portfolio investors into the tax net and must be clarified by the government, said K.R. Sekar, a partner at Deloitte Touche Tohmatsu India LLP.